Autoline Daily

The auto bailouts of GM and Chrysler have been a lightning rod in this year’s election campaign, but new polls show Americans are starting to warm up to them. GM and Chrysler dealers that survived the restructuring are now seeing record sales, and profits. Mazda worked some magic on the new CX-5 to make it handle well and ride smoothly. All that and more, plus John responds to some of his favorite questions and comments from the past week in “You Said It!”

This is Autoline Daily for March 15th, which is really the ides of March, unlike what I said on Monday’s show, but in any case, here’s the news.

‘MERICANS WARM UP TO BAILOUTS
The auto bailouts of GM and Chrysler have been a lightning rod in this year’s election campaign. Back in 2008 and 2009 when the Bush and Obama Administrations stepped in to bailout GM and Chrysler, six out of 10 Americans opposed them. But the New York Times reports the public is starting to warm up to the bailouts. A new Gallup poll says the approval and disapproval numbers have gotten closer with 44 percent approving and 51 percent against the loans. And a new Pew Poll says a majority of Americans say the bailouts were good for the economy. So why the change of heart? GM and Chrysler are posting big profits and hiring thousands of people.

DEALER PROFITS SOAR
And speaking about that rebound, GM and Chrysler dealers who survived the restructuring are now seeing record sales. According to Bloomberg, dealers are now hiring salespeople and technicians and spending more on renovations and advertising. The average dealer more than doubled their pre-tax profit to $785,000. GM says more than 90 percent of its dealers are now profitable, the highest since the mid ‘70s and Chrysler says 86 percent are profitable up from 49 percent in 2008.

INDIA OVERTAKING JAPAN (subscription required)
Russia’s and Brazil’s economies are booming, and car sales are growing right along with that. China is the star of the developing nations, but India is not sitting still. By 2016 India is projected to overtake Japan as Asia’s second-largest auto market. New-vehicle sales are estimated to hit nearly 5 million this year, up from around 3 million last year. Of course India is a loooooong way from topping China, where almost 18 million new vehicles were sold in 2011, and could hit 20 million this year.

MAZDA’S SUSPENSION MAGIC
Here’s another fascinating tech tidbit we found on the new Mazda CX-5. The engineers wanted to use stiffer rear bushings for better handling, but that could make the ride too stiff. They knew if they could raise the attachment point of the rear trailing arm, like you see on the right-hand side of this drawing, it would smooth out the bumps, allowing for stiffer bushings. But raising the attachment point would require raising the floor height, which would reduce interior room. Instead, they created a pocket in the rear frame rail and tucked the attachment point in there. It’s a simple yet clever solution, and one that makes the CX-5 a delight to drive.

POLICE STATE
The Brits sure love those surveillance cameras. No wonder George Orwell was British; he knew big Brother was watching! And now British motorists may have to contend with even more monitoring if a new government proposal becomes law. Autoblog reports they’re considering installing cameras at gas stations in order to determine whether drivers have valid insurance. It’s estimated some 1.4 million motorists in the UK are uninsured. That’s one in 25! But it’s even worse in the U.S. About one in seven ‘Merican drivers are not covered! That is 14 percent! Even so, I bet we don’t get them cameras!

Coming up next, it’s time for You Said It!

And now it’s time for some of your feedback.

Kit Gerhart heard me say that diesels now outsell hybrids in the U.S., but wants to know, “Do CAR diesels outsell CAR hybrids, or are you including diesel pickups?” Kit, that includes diesel pickups, SUVs and passenger cars. But the hybrid sales numbers also include pickups, SUVs and passenger cars, so I think it’s a valid comparison. By the way, the hybrid number also includes mild hybrids, like GM’s eAssist, and some people believe those should not be counted as hybrids.

Wim van Acker writes in to say, “John was not sure whether Ms. Piech is the fourth wife. She is, and in Germany people jokingly say that is reflected in the Audi logo with its four rings, representing the four wedding rings of Mr. Piech.” Wim, you made my day with that comparison. That is hilarious!

C-Tech wants to know, “Why is VW-Audi buying Ducati?” C-Tech, your question reminds me of an old joke they used to tell at Ford Finance 60 years ago. It goes like this: Why do we build grey iron foundries? Most people would answer, “To make grey iron?” And the response was, “No, to make money!” So when you ask why is Audi buying Ducati, the answer is, to make money. Audi believes that adding another luxury brand to its line-up, even if they are motorcycles, will help it make more money.

Brett really liked our report on the DeltaWing. “Love it. If Dan Gurney saw something in that design, then it definitely has something going for it. I hope it doesn’t succumb to misfortune or teething problems during the race. I’d like to see how the concept performs on its merits against the traditional designs.” Brett, I think we can count on it to have some teething problems. That’s why they’re racing it at Sebring this weekend, all with the goal of getting it to the 24 hours of LeMans in June.

William Schultz wants to know more about the Chevy Captiva. “Don’t remember any news on the Chevy (Saturn), Captiva (Vue) on Autoline Daily. Are these newly built vehicles, old Saturn Vues, or imports from Korea?” William, the Chevy Captiva is indeed the Saturn Vue and in the U.S. market they are only sold to fleet customers, so you’re not going to see it in your local Chevy showroom. Those vehicles are made in GM’s Ramos Arizpe plant in Mexico, and last year they sold a little over 7,000 of them in the American market.

Thanks for all your comments and letters, they make us laugh, and curse, and think. And that makes this job fun.

Before we go, please join us tonight for Autoline After Hours, but at our new time, 6:00 p.m. Eastern Time, which is 22:00 GMT for all our international viewers. Tonight we have Bryce Hoffman from the Detroit News talking about his latest book with all the inside info of what’s been going on at Ford. Join me and the Autoextremist, Peter De Lorenzo for some of the best discussion of what’s going on with cars and the people who make them.

Not according to everyone I talk to . Actually I’ve yet to meet a single person lately who says anything positive about the bailouts . With most of our friends/contacts/ associates being to the left of center politically , I might add

Methinks the NYTimes , much as I love the paper , is a bit biased towards Obama , therefore scewing the numbers on the so called Polls in order to get Obamaclaus’s ratings back up

Italy now has the UK beat hands down / chasing after , harassing / bothering the friends- work place of anyone owning an Exotic/ Luxury Car to make sure their reported income justifies the price of ownership of their car of choice

Heck they’re going so far as to interview your waiter after you’ve left the restaurant as well as your barber health club etc

The Italian news is reporting that many ( even the law abiding ones ) Exotic/Luxury car drivers are leaving their autos at home out of fear from the level of Police Harassment thats currently being implemented

Sounds like a Car Spotting trip to Italy right now will garner you a couple of FIATs – maybe a MINI or two and perhaps a mid class Alfa 8)

John, Did you say “Loans”? GM & Chrysler were “forced” into bankruptcy. The UAW became the winner while others (bondholders and other stakeholders) took the losses. When, Mr. President, did leadership mean breaking the law? The Big 3 needed a hand “up”, not a hand “out”. Thank God Ford withdrew while there was still time.

I agree with TJ, the New York Times, or should I say, Obama Times, are engaging in crony journalism.

Delta Wing. People get their noses out of whack when they see this car, but my question is what happens on the track when the Delta Wing goes through traffic and turns. With the needle nose, it’s going to be a new experience for drivers to know exactly where the rear corners of the car are, and how to place the car on apexes and track-out points. You’ll find my rear planted right here this weekend, watching Sebring on ESPN3.com

Well, John, we may not get the cameras like the Brits may, but the state and local P.D.s around here have license plate readers attached to each side of trunk lid. It automatically scans license plates and alerts an officer if it belongs to a scofflaw. I’m sure they have them in Michigan and elsewhere also. I guess it beats the cameras watching over the Brits.

I’d like to give anyone opposed to the auto bailouts a pop quiz on political economy, synthetic CDOs, derivative swaps, and commercial credit. It would get ugly, real fast. But as the pols say, ‘who cares what you think?’

Dealer profits double? Dealers reporting record profits not seen since the ’70s?

Well, whadda ya know… It really DIDN’T take a rocket scientist to predict these results after the dealer network slash & burn of a couple years ago.

Even with an unchanged demand, the remaining dealers would see higher traffic and sales. Shocking though that for decades Toyota has sold as many vehicles as they have utilizing a dealer network roughly 1/3 the size of either Ford or GM.

In fact, there’s still some room for pairing down of more dealerships.

Well, a lot of people I know in Indiana favored the “bailouts,” because they work for Chrysler, GM, and Delphi, and know that the “bailouts” saved their jobs.

Even some of people I know in Florida, who were not connected with auto industry, wanted GM and Chrysler to stay around. Yes, I also know a number of people, a couple of them being Hyundai drivers, who wouldn’t have minded seeing GM and Chrysler disappear.

# 6 Wanna bet it doesn’t work ? ( fact is preliminary tests already prove that it does not ) Anyway I’ll be watching the Australian F1 on DVD

#8 Pop quiz away . What ever you’ve got , I can come back on with what I’ll guess is a lot more informed insider info than you have on hand .

Simple fact is the Bailout monies as well as the TARP funds would of been better spent on a Genuine WPA program to fix all the massive amounts of infrastructure thats on the verge of failing in the US , benefitting all instead of a select few

But hey Wise Acre . Here’s a question/ thought for you to chew on

If those Automotive Bailouts were so damn successful then …

WTH is it Detroit ( the city ) is about to be taken over by both the Michigan and the US Government ?

Because of all the ‘ jobs’ the bailouts have provided ?

Maybe due to the Big Three now being soooooo successful ( in their hype on their so called ‘ profits ‘ )

Or is it maybe that $23.77 Billion that the Auto makers have lost in US tax payers monies ?

And who cares what I think ? The Idiot on the phone every other day begging me to donate to Obamaclaus’s 2012 campaign and ” Mr Tj , being a past supporter , wouldn’t you at least be willing to perform at an Obama benefit … pretty please ? ”

As I slam the phone on his/her ear after giving them a piece of my mind and telling them for the umpteenth time to leave me the _____ alone

Thats who !

But by all means HtG . Put your best game on and Bring it On !

Lets see who’s got the better perspective , both historically and presently when it comes to Economics

I reference to the bailout,s many of my friends work for the auto companies and the western New York economy would have never recovered in my life time. We were and still are suffering from a loss of well pay jobs. Losing GM would have been the finial nail.

That .. fellow site mate is the entire Bailout TARP myth in a Nutshell . Convincing everyone GM would of been lost without them . Chrysler maybe . But not GM ! They’d of managed just like so many before them . And if they couldn’t …. well then the Bailouts / TARP funds have only DELAYED the inevitable …. and it’ll happen anyway

How would GM sales have been, if the company had gone through a long, drawn out bankruptcy that went on for years? I doubt that they would be nearly as good as they are now, with at least a little stability with the situation.

Believe me tj, Detroit, the city, going Bankrupt has not one single iota to do with anything automotive! The crooks that ran the city with their side deals and endless corruption, along with a non-viable downtown district that no one wants to go to except for a Lions or Red Wings game is the cause. If anything when GM moved their headquarters into the Rennessance Center it propped up the city for a little while longer, but it was always inevitible that the city would go under. The population in the city has been shrinking for several years as people move to the much nicer suburbs and the glorious leaders in Detroit didn’t adjust the size or pay of their workers to compensate.

Implying that Detroit is in trouble due to the auto industry is seriously one of the most misguided statements I have heard from you tj. Usually I am very impressed with your insight, but I just lost a little respect for you after this one…

#16 How many more jobs could of been created had a Real WPA program been implemented , never mind the droves that’d of been taken off the Welfare rolls ( WPA rules stated that if you were able …. No Work No Money ) along with the massive amounts of work needed on our highways , parks ( been to the National Mall lately ? its shameful ) as well as those jobs being spread Nationwide rather than in a few select areas .

Factor that in and GM’s temporary woes ( assuming they happened ) pale in comparison

OK tj, please explain why an exception should have been made for GM/Chrysler, when the whole world economy was and is supported by the unprecedented intervention of govts and central bankers. Please explain why you’re so angry at Obama for not being the President you thought he’d be. Please explain why out of all the borrowed money this country is living on, and paying govt salaries from, it is your tax dollars which have been directed to bailout the unworthies at Government Motors: Our taxes don’t cover squat. Did you see the Trillion that just got loaned to the banks in Europe? They’re all dead. Do you know what a chain of title is in mortgage backed securities is? Because the rules governing transfers to CDO trusts were not followed, rendering investors’ MBS worthless, and our banks caput. Our whole economy is a sham, not just VW. Because of financial engineering of balance sheets in companies around the world, based on derivatives, company ledgers are a nonsense. But regulators are looking the other way, as they keep creating money to keep the whole lie from unraveling. Let me also give a nod to the prosecution of Daimler which is being held in abeyance, and for which Herr Lieb got canned.

Then you do not understand the relationship between a City and its Commerce ( Industry Retail etc ) what so ever .

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#18 They only support one ( Lotus Renault F1 ) The other having been taken over by Caterham F1 . No relation financial or otherwise

Where’s the money coming from you ask ?

Damn good question . Some of it from Renaults wallet . Some from the sponsors A Nice chunk from Petrov’s Pay For Drive … but in light of the Malaysians on a the brink of dumping Lotus en total ( that’d be Lotus Automobiles / Lotus Engineering and Lotus F1 ) I’ve no idea , unless the Malaysians already ponied up for the season WTH Team Lotus is getting the rest of the funding from

20 National Mall. I was there on Monday. The Martin Luther King Jr. memorial is open, and will for the first time have its pink limestone lit up by the Cherry blossoms. The Mall is green, with some construction going on near the American History Museum. Security is tight; I saw a working dog sniffing along the planters. As you stroll you can’t help but notice the soldiers from the Pentagon doing their lunchtime runs. DC is in general quite built up since a decade ago. (sleaze in the DC govt is also quite healthy, thank you)

See HtG . Here you are taking the Liberal Extreme Freakout viewpoint , making false assumptions and not asking before exclaiming .

I DO NOT want to ” DUMP ” the two Automakers . I WANT them to stand on their own two feet . With a loan needing paying back ? OK . With a slew of rules and regulations as to what they can do with those ” Loans ” Fine . Needing a bit of Trade Protectionism ? You betcha , lets get it in gear

But handing a bunch of irresponsible , spend happy , pie in the sky technology lunatics with salaries they should be embarrassed to receive in light of theirs and their companies performance a ton of money … all because for the last 30 years they could not pull their heads out to where the Sun Does Shine ( look at how long OPEL alone has been in the weeds ) …

… and then to add insult to injury , demand of the Tax Payers , rebates incentives etc …. all to sell a piece of junk that nobody wants or cares about ?

Then …. I put my Foot down and say Hell No ! Not with my tax dollars you don’t .

Take a breath HtG . Remember who you’re talking to . Then put a park on all the assumptions/conclusions and remind yourself what all I’ve been over in this ongoing game of Obamanomics – ObamaMath ( love his claim today that 55 mpg would save me $8K a year in gas when in fact I only spend , assuming 16k miles a year $4K ) as well as ObamaClaus handing out money like it was Christmas to every Tom Dumb_____ and Harry with any Idiotic Vaporware idea they might come up with .

As well as reminding yourself that I supported , donated and stumped for Obama round 1 .But not Round 2 .

FYI lets stick to Cars if we’re to continue this discussion 9 it is an automotive website after all ) and not even go down the other multitude of Bailout roads we could travel . Especially the Financial Institutions

Regarding Obama, he’s not quite what I hoped for when I supported him in ’08, but given the alternatives, I still support him. What if we happened to end up with Santorum? He’d do everything he could to outlaw contraception, put all gays back in the closet, or prison, and he’d do what he could to replace science classes with “intelligent design” classes in the schools. I’ll take zObama. Sorry about the political comment. I’ll try to stay away from that.

No tj, I understand it, what you do not understand is the Detroit, the city, does not rely on automotive commerce. Other than a GM (Hamtramck – where they make the Volt) and a Chrysler Assembly Plant (Jefferson North where they make Ram Pickups) and the GM Headquarters, there is no automotive commerce in Detroit. Detroit is a service city that relys on hotels, dining, the occasional event and parking meters for commerce. They brought a few business downtown (Compuware, etc.) at a high tax break but nothing has taken hold. Detroit ceased being a genuine Motor City several years ago.

When it comes to the Sham the entire Worlds economy is in we’re on the same page . Do I know all about the lovely SNAFU that is mortgages ; why yes I do / do I know about the Euro banks ; perhaps more than you do ( the cuzes ) do I know how much my taxes pay for ; yes I do .do I know even more about the mess the US banks are in ; yup

So yes . Everything is a complete abject and utter mess . Question is ; Am I willing to contribute to the mess ? Well no not willingly .

So all those World Headquarters for the Big Three are what ? Empty shells ?

All the manufacturing thats left ? ( by your own admission ) Had no effect on Detroit’s economy ? Seriously ?

All those CEO’s CFO’s etc from the Big Three living in Detroit . They’re not a part of the economy ?

All the other Corporate aspects /divisions of the Big Three ? No economic impact as well ?

Come on T Bejima . You know better .

Fact is its been the Big Three’s exit ; along with a healthy amount of corruption ( here’s a clue EVERY CITY IN THE US HAS CORRUPTION ) along with every other manufacturing sector thats bailed etc thats been Detroit’s downfall

Its taken a long time for Detroit tot get where it is today ( in the deep end of the swamp weeds ) and the Big Three have been part and parcel of that downfall since Day One . Sending jobs elsewhere etc .

So darn tootin I place most of the blame on the Big Three .. for both the past and doing Nothing for the present

Wonder how much GM paid Galop for that poll data.
GM’s quickie bankruptcy violated 100 years of Contract Law and even Rattner admitted he “put more cash into GM than we now, in hindsight, know was needed”
GM may survive/thrive, BUT it was via un-American (anti-capitalism) Auto Task Force tactics!
NEVER buying another GM car in my lifetime!

So let’s not bailout GM/Chrysler, and let the normal process takeover. Who will provide the debtor in possession (DIP) financing during the bankruptcy? There is no credit available because the bank, hedge funds, insurance cos, pension funds are having a coronary. Do you want to ask Japan or China for it? Was it GM/Ch’s fault that there was no financial system available for them like Ford had when it died a few years before(in the midst of the credit bubble)? It’s not possible to talk cars without also thinking about the wider world of finance.

You’re old enough and cognizant enough of European and US history to dread financial calamity, tj. Why would you have risked the midwest economy and all those local community car dealerships?

Warming up to the bailouts, are we? No one asked me about them! Yes, I’d buy a Fiat 500, and maybe the new Dart (since it’s based on an Alfa Romeo), but nothing doing with any others, especially GM. No, I’ll stick to automakers who know how to make a buck without having the government come in and take them from me.

35. You have maintained your purity, Mike. How do you feel about your pension and money market being kept alive by the govt? How about the availability of working capital for your business? How about the capital which finances car purchases in the US? Think that’s the free market? You’ll kiss those asta la vista, too? The hypocrisy of the american people is astonishing, their wishful economic thinking better suited to some kind of faith based fairy tale.

Here you is, tj. An article about how Romney will cut funding for NEA and NEH because he doesn’t want to borrow from China to pay for them. Notice he’s not talking about spending your tax dollars on them either. Let Barry’O know how much you don’t support him anymore.

The Sonic is called an Aveo in all of the other markets other than the US Pedro. Don’t understand your point. This is a brand new vehicle and shares none of the parts from the previous Aveo. The Sonic version continues to get praise from all of the markets, no matter what the name, so it appears it is “all that”.

TB, I think the deal is that there’s generational anger and wariness which has been built up toward Detroit. I know I have my own scars. I also have negative opinions about some other makes as well; looking at you Munich.